Kellogg Company (NYSE:K) Growing Rapidly, But Expectations Still High

Kellogg Company (NYSE:K) shares have been experiencing accelerated earnings and sales growth over the past five years.  Over that time frame the firm has seen earnings growth of 6.40% and sales growth of -1.90%.

Investors may be trying to decide which way the stock market will shift over the next couple of quarters. Having a general idea based on research is one thing, but constantly trying to time the market may lead to negative portfolio performance. Of course, overall market downturns can be frustrating to everyone invested in shares. Being able to ride out the day to day volatility and make proper investing decisions based on solid stock examination, may help the investor secure profits down the line. Investors who spend too much time focusing on stocks that have already made a run may find themselves in a sticky situation if they get into the name to late. Just because a certain stock has been going up for a long time, it doesn’t mean that the momentum will be sustained into the future. Taking the time to find quality stocks instead of just looking at the hot stock of the day, may allow investors to keep thriving in the market.

While the firm has enjoyed the upward movement, it’s important to look at analyst expectations and where the company is headed from here.  On a consensus basis, analysts are projecting EPS growth of -0.05% for next year and have a $66.47 one year price target on the stock.   The stock recently traded at $59.43.

 Six Fundamental Characteristics of Great Growth Stocks

#6 Huge Mass Markets – The more potential customers there are, the greater the possibility that both the company, and the investment in said company, will be a success. 

#5 Market Dominance/Barriers to Entry – Look for companies who hold patents.  This is great barrier to entry, ensuring no competition.  Look for companies who dominate the market, blowing away the competition, though market dominance can be harder to measure. 

#4 Accelerating Earnings Growth – If a company’s earnings growth rate increases for two consecutive quarters, their growth is accelerating.  Faster growth is better growth, and a company whose earnings growth rate is accelerating is an attractive investment.

#3 Triple-Digit Revenue Growth – Companies growing their revenues at triple-digit rates (100% or better) are usually smaller and less known, making them attractive for buying by institutions. 

#2 High Profit Margins – In recent decades, high-margin stocks have beaten low-margin stocks by a huge amount. 

#1 Top Notch, Innovative Management – All great managers who led their companies to success usually did so by thinking differently.  There is no surefire and quick measurement of management talent.  When you find a top manager, one with a record of prior success and accolades, you should strike.  Top managers usually find a way to overcome obstacles. 

Let’s take a look at how the stock has been performing recently.  Over the past twelve months, Kellogg Company (NYSE:K)‘s stock was 4.24%.  Over the last week of the month, it was 1.45%, -14.67% over the last quarter, and  -14.61% for the past six months. 

Kellogg Company (NYSE:K)’s EPS is 5.32.  Last year, their EPS growth was 85.50% while their EPS growth over the past five years is 6.40%.  Analysts are predicting Kellogg Company’s stock to grow -0.05% over the next year and 3.30% over the next five.

Investors may be wondering what’s in store for the next couple of months in terms of the stock market. Bull markets are times when investors may be willing to take some liberties with stock picks. Risk management is typically on the minds of many investors. Investors trying to gain an advantage may be searching for the perfect balance and diversification to help ease the risk and give the portfolio a needed boost. With so many different stocks to study, it may take a while to hone in on the proper ones. Investors will also be closely following the next round of economic data. Investors may be on the lookout for the next major data announcement that either keeps the bulls in charge or ushers in the bears.

Receive News & Ratings Via Email - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings with MarketBeat.com's FREE daily email newsletter.